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Stratfor's analysis. (See 2 below.)
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Interesting time line and forecast. Political and no-political. Food for thought. (See 3 and 3a below.)
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Bust or not? You decide. (See 4 below.)
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Dick
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1)Langone: Recovery to Begin Once Obama Ousted
By Forrest Jones
The U.S. economy will embark on the road to recovery once President Barack Obama is voted out of the White House, says billionaire investor and Home Depot co-founder Ken Langone.
"If we change the faces in the White House, we're on the road to recovery," Langone tells CNBC.
"I believe it's that simple: we need leadership, we need cheerleading, we need encouragement," he told CNBC.
"We need businessmen and fat cats to feel like they're doing something good, not that they're villains and not that they're criminals. America's best days are ahead."
The U.S. needs leadership committed to cutting back on spending,
Langone says, criticizing leaders for allegedly ignoring recommendations made by his deficit watchdog panel headed by Erskine Bowles, former Clinton chief of staff, and former Republican Senator Alan Simpson.
"The fact of the matter is I think that we aren't even begun the recovery under this president's watch. Unfortunately, this guy is in over his head, in my opinion, big time. We got to have a change in the White House,"
Langone says, adding both sides of the political aisle deserve some blame as well.
"Politicians are like drug addicts around money. They can't stop themselves."
)A congressional supercommittee, made up of six Democrats and six Republicans, failed to come up with ways to cut spending by $1.2 trillion, a task they were given as part of a compromise to raise the government's debt ceiling back in August.
Market watchers have said that continued political impasses in Washington will fuel more volatility on Wall Street and could hamper economic growth, the latter of which appears to be souring.
The government recently revised the country's third-quarter gross domestic product growth rate to 2 percent from 2.5 percent, and economists say spending concerns and political bickering in Washington will continue to weigh down on growth.
"We expect the rate of economic growth to weaken in the current quarter, and the situation may deteriorate further if uncertainty arising from the supercommittee budget discussions and the debt crisis in Europe continue to adversely affect both business and consumer confidence in the U.S. and its major export markets," says Chris Williamson, chief economist at Markit, a British research firm, according to the Los Angeles Times.
© Moneynews. All rights reserved.
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2) Syria, Iran, and the Balance of Power in the Middle East
By George Friedman
U.S. troops are in the process of completing their withdrawal from Iraq by the end-of-2011 deadline. We are now moving toward a reckoning with the consequences. The reckoning concerns the potential for a massive shift in the balance of power in the region, with Iran moving from a fairly marginal power to potentially a dominant power. As the process unfolds, the United States and Israel are making countermoves. We have discussed all of this extensively. Questions remain whether these countermoves will stabilize the region and whether or how far Iran will go in its response.
Iran has been preparing for the U.S. withdrawal. While it is unreasonable simply to say that Iran will dominate Iraq, it is fair to say Tehran will have tremendous influence in Baghdad to the point of being able to block Iraqi initiatives Iran opposes. This influence will increase as the U.S. withdrawal concludes and it becomes clear there will be no sudden reversal in the withdrawal policy. Iraqi politicians' calculus must account for the nearness of Iranian power and the increasing distance and irrelevance of American power.
Resisting Iran under these conditions likely would prove ineffective and dangerous. Some, like the Kurds, believe they have guarantees from the Americans and that substantial investment in Kurdish oil by American companies means those commitments will be honored. A look at the map, however, shows how difficult it would be for the United States to do so. The Baghdad regime has arrested Sunni leaders while the Shia, not all of whom are pro-Iranian by any means, know the price of overenthusiastic resistance.
Syria and Iran
The situation in Syria complicates all of this. The minority Alawite sect has dominated the Syrian government since 1970, when the current president's father — who headed the Syrian air force — staged a coup. The Alawites are a heterodox Muslim sect related to a Shiite offshoot and make up about 7 percent of the country's population, which is mostly Sunni. The new Alawite government was Nasserite in nature, meaning it was secular, socialist and built around the military. When Islam rose as a political force in the Arab world, the Syrians — alienated from the Sadat regime in Egypt — saw Iran as a bulwark. The Iranian Islamist regime gave the Syrian secular regime immunity against Shiite fundamentalists in Lebanon. The Iranians also gave Syria support in its external adventures in Lebanon, and more important, in its suppression of Syria's Sunni majority.
Syria and Iran were particularly aligned in Lebanon. In the early 1980s, after the Khomeini revolution, the Iranians sought to increase their influence in the Islamic world by supporting radical Shiite forces. Hezbollah was one of these. Syria had invaded Lebanon in 1975 on behalf of the Christians and opposed the Palestine Liberation Organization, to give you a sense of the complexity. Syria regarded Lebanon as historically part of Syria, and sought to assert its influence over it. Via Iran, Hezbollah became an instrument of Syrian power in Lebanon.
Iran and Syria, therefore, entered a long-term if not altogether stable alliance that has lasted to this day. In the current unrest in Syria, the Saudis and Turks in addition to the Americans all have been hostile to the regime of President Bashar al Assad. Iran is the one country that on the whole has remained supportive of the current Syrian government.
There is good reason for this. Prior to the uprising, the precise relationship between Syria and Iran was variable. Syria was able to act autonomously in its dealings with Iran and Iran's proxies in Lebanon. While an important backer of groups like Hezbollah, the al Assad regime in many ways checked Hezbollah's power in Lebanon, with the Syrians playing the dominant role there. The Syrian uprising has put the al Assad regime on the defensive, however, making it more interested in a firm, stable relationship with Iran. Damascus finds itself isolated in the Sunni world, with Turkey and the Arab League against it. Iran — and intriguingly, Iraqi Prime Minister Nouri al-Maliki — have constituted al Assad's exterior support.
Thus far al Assad has resisted his enemies. Though some mid- to low-ranking Sunnis have defected, his military remains largely intact; this is because the Alawites control key units. Events in Libya drove home to an embattled Syrian leadership — and even to some of its adversaries within the military — the consequences of losing. The military has held together, and an unarmed or poorly armed populace, no matter how large, cannot defeat an intact military force. The key for those who would see al Assad fall is to divide the military.
If al Assad survives — and at the moment, wishful thinking by outsiders aside, he is surviving — Iran will be the big winner. If Iraq falls under substantial Iranian influence, and the al Assad regime — isolated from most countries but supported by Tehran —survives in Syria, then Iran could emerge with a sphere of influence stretching from western Afghanistan to the Mediterranean (the latter via Hezbollah). Achieving this would not require deploying Iranian conventional forces —al Assad's survival alone would suffice. However, the prospect of a Syrian regime beholden to Iran would open up the possibility of the westward deployment of Iranian forces, and that possibility alone would have significant repercussions.
Consider the map were this sphere of influence to exist. The northern borders of Saudi Arabia and Jordan would abut this sphere, as would Turkey's southern border. It remains unclear, of course, just how well Iran could manage this sphere, e.g., what type of force it could project into it. Maps alone will not provide an understanding of the problem. But they do point to the problem. And the problem is the potential — not certain — creation of a block under Iranian influence that would cut through a huge swath of strategic territory.
It should be remembered that in addition to Iran's covert network of militant proxies, Iran's conventional forces are substantial. While they could not confront U.S. armored divisions and survive, there are no U.S. armored divisions on the ground between Iran and Lebanon. Iran's ability to bring sufficient force to bear in such a sphere increases the risks to the Saudis in particular. Iran's goal is to increase the risk such that Saudi Arabia would calculate that accommodation is more prudent than resistance. Changing the map can help achieve this.
It follows that those frightened by this prospect — the United States, Israel, Saudi Arabia and Turkey —would seek to stymie it. At present, the place to block it no longer is Iraq, where Iran already has the upper hand. Instead, it is Syria. And the key move in Syria is to do everything possible to bring about al Assad's overthrow.
In the last week, the Syrian unrest appeared to take on a new dimension. Until recently, the most significant opposition activity appeared to be outside of Syria, with much of the resistance reported in the media coming from externally based opposition groups. The degree of effective opposition was never clear. Certainly, the Sunni majority opposes and hates the al Assad regime. But opposition and emotion do not bring down a regime consisting of men fighting for their lives. And it wasn't clear that the resistance was as strong as the outside propaganda claimed.
Last week, however, the Free Syrian Army — a group of Sunni defectors operating out of Turkey and Lebanon —claimed defectors carried out organized attacks on government facilities, ranging from an air force intelligence facility (a particularly sensitive point given the history of the regime) to Baath Party buildings in the greater Damascus area. These were not the first attacks claimed by the FSA, but they were heavily propagandized in the past week. Most significant about the attacks is that, while small-scale and likely exaggerated, they revealed that at least some defectors were willing to fight instead of defecting and staying in Turkey or Lebanon.
It is interesting that an apparent increase in activity from armed activists — or the introduction of new forces — occurred at the same time relations between Iran on one side and the United States and Israel on the other were deteriorating. The deterioration began with charges that an Iranian covert operation to assassinate the Saudi ambassador to the United States had been uncovered, followed by allegations by the Bahraini government of Iranian operatives organizing attacks in Bahrain. It proceeded to an International Atomic Energy Agency report on Iran's progress toward a nuclear device, followed by the Nov. 19 explosion at an Iranian missile facility that the Israelis have not-so-quietly hinted was their work. Whether any of these are true, the psychological pressure on Iran is building and appears to be orchestrated.
Of all the players in this game, Israel's position is the most complex. Israel has had a decent, albeit covert, working relationship with the Syrians going back to their mutual hostility toward Yasser Arafat. For Israel, Syria has been the devil they know. The idea of a Sunni government controlled by the Muslim Brotherhood on their northeastern frontier was frightening; they preferred al Assad. But given the shift in the regional balance of power, the Israeli view is also changing. The Sunni Islamist threat has weakened in the past decade relative to the Iranian Shiite threat. Playing things forward, the threat of a hostile Sunni force in Syria is less worrisome than an emboldened Iranian presence on Israel's northern frontier. This explains why the architects of Israel's foreign policy, such as Defense Minister Ehud Barak, have been saying that we are seeing an "acceleration toward the end of the regime." Regardless of its preferred outcome, Israel cannot influence events inside Syria. Instead, Israel is adjusting to a reality where the threat of Iran reshaping the politics of the region has become paramount.
Iran is, of course, used to psychological campaigns. We continue to believe that while Iran might be close to a nuclear device that could explode underground under carefully controlled conditions, its ability to create a stable, robust nuclear weapon that could function outside a laboratory setting (which is what an underground test is) is a ways off. This includes being able to load a fragile experimental system on a delivery vehicle and expecting it to explode. It might. It might not. It might even be intercepted and create a casus belli for a counterstrike.
The main Iranian threat is not nuclear. It might become so, but even without nuclear weapons, Iran remains a threat. The current escalation originated in the American decision to withdraw from Iraq and was intensified by events in Syria. If Iran abandoned its nuclear program tomorrow, the situation would remain as complex. Iran has the upper hand, and the United States, Israel, Turkey and Saudi Arabia all are looking at how to turn the tables.
At this point, they appear to be following a two-pronged strategy: Increase pressure on Iran to make it recalculate its vulnerability, and bring down the Syrian government to limit the consequences of Iranian influence in Iraq. Whether the Syrian regime can be brought down is problematic. Libya's Moammar Gadhafi would have survived if NATO hadn't intervened. NATO could intervene in Syria, but Syria is more complex than Libya. Moreover, a second NATO attack on an Arab state designed to change its government would have unintended consequences, no matter how much the Arabs fear the Iranians at the moment. Wars are unpredictable; they are not the first option.
Therefore the likely solution is covert support for the Sunni opposition funneled through Lebanon and possibly Turkey and Jordan. It will be interesting to see if the Turks participate. Far more interesting will be seeing whether this works. Syrian intelligence has penetrated its Sunni opposition effectively for decades. Mounting a secret campaign against the regime would be difficult, and its success by no means assured. Still, that is the next move.
But it is not the last move. To put Iran back into its box, something must be done about the Iraqi political situation. Given the U.S. withdrawal, Washington has little influence there. All of the relationships the United States built were predicated on American power protecting the relationships. With the Americans gone, the foundation of those relationships dissolves. And even with Syria, the balance of power is shifting.
The United States has three choices. Accept the evolution and try to live with what emerges. Attempt to make a deal with Iran — a very painful and costly one. Or go to war. The first assumes Washington can live with what emerges. The second depends on whether Iran is interested in dealing with the United States. The third depends on having enough power to wage a war and to absorb Iran's retaliatory strikes, particularly in the Strait of Hormuz. All are dubious, so toppling al Assad is critical. It changes the game and the momentum. But even that is enormously difficult and laden with risks.
We are now in the final act of Iraq, and it is even more painful than imagined. Laying this alongside the European crisis makes the idea of a systemic crisis in the global system very real.
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3) IN FEDERAL BUDGET, OBAMA ADMINISTRATION, OBAMA ADMINISTRATION SCANDALS
THE SUPERCOMMITTEE’S FAILURE: WHAT REALLY HAPPENED
BY JOHN HINDERAKER
Finger-pointing is in full swing, but the reality is that the Supercommittee’s failure to come to an agreement on spending reductions is just one chapter in a very long story–the story of the Democratic Party’s absolute refusal to come to grips with the country’s fiscal crisis. Republicans on the Senate Budget Committee have produced this helpful time line, with links to supporting documentation. The story of the Democrats’ ongoing malfeasance needs to be better understood:
January 25 – In his State of the Union address, President Obama proposes freezing “annual domestic spending for the next five years.” This freeze would lock in elevated spending levels (24 percent non-defense discretionary, not including stimulus) and produce an estimated $3.8 trillion in deficits over the period in question. Subsequent analysis revealed that, because the White House shifted and hid new spending, non-defense discretionary spending would actually increase even further next year.
February 14 – President Obama proposes a budget with $8.7 trillion in new spending (CBO’s re-estimate actually finds $9.6 trillion in new spending).
February 15 – The House of Representatives begins debate on a bill that would cut spending by $61 billion. President Obama promptly issues a veto threat.
April 11 – Press Secretary Jay Carney: “We should move quickly to raise the debt limit and we support a clean piece of legislation to do that.”
April 13 – President Obama delivers a speech where he lays out a “framework” that he claims will lead to $4 trillion in deficit reduction over the next 10–12 years. In reality, using OMB’s own numbers, deficits under the “framework” are $3.2 trillion higher than the president’s own fiscal commission.
April 15 – The Republican-controlled House of Representatives passes its budget, which cuts $6 trillion in comparison to the President’s budget.
April 19 – S&P assigns a negative outlook to the U.S. credit rating, signaling at least a one-in-three likelihood that the agency will lower the nation’s long-term rating.
May 1 – Total federal spending since President Obama took office reaches approximately $8 trillion.
May 11 – Austan Goolsbee, chair of the president’s Council of Economic Advisers, says it is “quite insane” to tie spending cuts to the debt limit increase.
May 17 – Chairman Conrad continues to delay the unveiling of his latest secret budget, announcing that “I’ll say something later — not today, probably… There are a lot of conversations under way.”
May 18 – Majority Leader Reid says it would be “foolish” for Senate Democrats to offer a budget.
May 19 – Chairman Conrad announces he will not reveal a budget to the public until after the Gang of Six produces a proposal.
May 25 – The Senate rejects President Obama’s budget by a vote of 0-97.
May 23 – Senator Schumer, when asked why there is no alternative to the House-passed budget, answers, “To put other budgets out there is not the point.”
May 26 – GOP Senators join Ranking Member Sessions in asking Reid not to break for the Memorial Day recess until Senate Democrats bring forward a budget so the Senate can fulfill its duty.
June 7 – Even some Senate Democrats become anxious about their party’s lack of a budget.
June 29 – Chairman Conrad tells Politico, “Senate Democrats have reached an agreement on a plan — just now — and we’ll be putting that out sometime soon.” (Note: the plan was never made public, but a leaked outline revealed that it contained as many as $2 in tax hikes for $1 in spending cuts.)
June 29 – Sessions renews call for the Senate to remain in town to deal with its budget and debt ceiling work.
July 1 – Sessions and Finance Committee Ranking Member Orrin Hatch ask the president to reveal, in detail, what his deficit reduction plans actually are. No response is received, and the president’s February budget remains the only plan he has ever put on paper (thus the only plan that can be estimated by CBO) and shared with Congress or the American people.
July 8 – On the 800th day since Senate Democrats passed a budget, the unemployment rate rises to 9.2 percent (the third straight month above 9 percent).
July 19 – Amid continuing calls for the president to reveal what spending cuts he actually supports, Carney says that “leadership is not proposing a plan for the sake of having it voted up or down…”
July 22 – At a press conference discussing his position on negotiating a debt limit increase, President Obama declares, “The only bottom line that I have is that we have to extend this debt ceiling through the next election, into 2013.”
August 2 – Following passage of the debt limit increase package in the Senate, President Obama calls for America to “live within our means” immediately before advocating a further increase in government spending, framed, as usual, as “investments.”
August 3 – Government borrowing tops 100 percent of GDP as the U.S. accumulates $4 trillion in gross debt under President Obama, well above the 90-percent threshold identified by economists Rogoff and Reinhart as when debt harms economic growth and brings down job creation.
August 5 – S&P downgrades the U.S.’ credit rating from AAA, the first time the nation has had less than the top rating since receiving it in 1917.
September 8 – Shortly after the passage of the debt limit deal and the spending cuts that went with it, President Obama announces a second stimulus bill that would cost $447 billion. CBO later admits that stimulus spending depresses long-term economic growth.
September 18 – President Obama unveils a deficit reduction plan that he claims will reduce deficits by $3 trillion through a combination of tax increases, war savings, and other spending cuts. But a Budget Committee analysis reveals that, thanks to a number of budget gimmicks, the plan would reduce deficits by only $1.4 trillion and would rely entirely on tax increases.
October 14 – 900 days pass since Senate Democrats last offered a budget plan.
November 7 – The Congressional Budget Office reports that total federal spending increased in Fiscal Year 2011 by $145 billion over the previous year’s level.
November 9 – House Minority Leader Nancy Pelosi claims that Democrats didn’t pass a budget when they controlled both chambers of Congress because “Republicans would have filibustered it,” but as she should know, budget resolutions can’t be filibustered.
November 11 – As the supercommittee continues its tense negotiations, President Obama departs for a nine-day trip to Bali, Indonesia, and Australia.
November 13 – Supercommittee member James Clyburn, the House Assistant Democratic Leader, says that a draft Democrat proposal has been outlined. A Budget Committee analysis estimates this outlined proposal to contain a dramatic tax increase-to-spending cut ratio of 4:1.
November 16 – On the 931st day since Senate Democrats offered a budget, the U.S. gross national debt tops $15 trillion.
November 18 – In search of common ground, Republican Sen. Pat Toomey puts forward a draft proposal with both spending cuts and tax revenue. Democrats summarily reject the offer.
November 21 – New York City Mayor Michael Bloomberg chides President Obama, saying that “It’s the Chief Executive’s job to bring people together & provide leadership. I don’t see that happening [with the] #SuperCommittee”
November 22 – President Obama places multiple calls, over the course of the month, to European leaders regarding their countries’ debt problems. Meanwhile, Jay Carney says it was “absolutely not” a problem for “him not to have been as involved” with the supercommittee negotiations.
What a record! If the voters understood how the Democratic Party has blocked every effort to bring fiscal sanity to Washington, would a single Democrat be returned to Washington next November?
3a)CHANGES THAT ARE COMING---- NOT GOOD *** NOT POLITICAL ***
CHANGES ARE COMING...
1. The Post Office. Get ready to imagine a world without the post office. They are so deeply in financial trouble that there is probably no way to sustain it long term. Email, Fed Ex, and UPS have just about wiped out the minimum revenue needed to keep the post office alive. Most of your mail every day is junk mail and bills.
2. The Check. Britain is already laying the groundwork to do away with checks by 2018. It costs the financial system billions of dollars a year to process checks. Plastic cards and online transactions will lead to the eventual demise of the check. This plays right into the death of the post office. If you never paid your bills by mail and never received them by mail, the post office would absolutely go out of business.
3. The Newspaper. The younger generation simply doesn't read the newspaper. They certainly don't subscribe to a daily delivered print edition. That may go the way of the milkman and the laundry man. As for reading the paper online, get ready to pay for it. The rise in mobile Internet devices and e-readers has caused all the newspaper and magazine publishers to form an alliance. They have met with Apple, Amazon, and the major cell phone companies to develop a model for paid subscription services.
4. The Book. You say you will never give up the physical book that you hold in your hand and turn the literal pages. I said the same thing about downloading music from iTunes. I wanted my hard copy CD. But I quickly changed my mind when I discovered that I could get albums for half the price without ever leaving home to get the latest music. The same thing will happen with books. You can browse a bookstore online and even read a preview chapter before you buy. And the price is less than half that of a real book. And think of the convenience! Once you start flicking your fingers on the screen instead of the book, you find that you are lost in the story, can't wait to see what happens next, and you forget that you're holding a gadget instead of a book.
5. The Land Line Telephone. Unless you have a large family and make a lot of local calls, you don't need it anymore. Most people keep it simply because they've always had it. But you are paying double charges for that extra service. All the cell phone companies will let you call customers using the same cell provider for no charge against your minutes.
6. Music. This is one of the saddest parts of the change story. The music industry is dying a slow death. Not just because of illegal downloading. It's the lack of innovative new music being given a chance to get to the people who would like to hear it. Greed and corruption is the problem. The record labels and the radio conglomerates are simply self-destructing. Over 40% of the music purchased today is "catalog items," meaning traditional music that the public is familiar with. Older established artists. This is also true on the live concert circuit. To explore this fascinating and disturbing topic further, check out the book, "Appetite for Self-Destruction" by Steve Knopper, and the video documentary, "Before the Music Dies."
7. Television. Revenues to the networks are down dramatically. Not just because of the economy. People are watching TV and movies streamed from their computers. And they're playing games and doing lots of other things that take up the time that used to be spent watching TV. Prime time shows have degenerated down to lower than the lowest common denominator. Cable rates are skyrocketing and commercials run about every 4 minutes and 30 seconds. I say good riddance to most of it. It's time for the cable companies to be put out of our misery. Let the people choose what they want to watch online and through Netflix.
8. The "Things" That You Own. Many of the very possessions that we used to own are still in our lives, but we may not actually own them in the future. They may simply reside in "the cloud." Today your computer has a hard drive and you store your pictures, music, movies, and documents. Your software is on a CD or DVD, and you can always re-install it if need be. But all of that is changing. Apple, Microsoft, and Google are all finishing up their latest "cloud services." That means that when you turn on a computer, the Internet will be built into the operating system. So, Windows, Google, and the Mac OS will be tied straight into the Internet. If you click an icon, it will open something in the Internet cloud. If you save something, it will be saved to the cloud. And you may pay a monthly subscription fee to the cloud provider.
In this virtual world, you can access your music or your books, or your whatever from any laptop or handheld device. That's the good news. But, will you actually own any of this "stuff" or will it all be able to disappear at any moment in a big "Poof?" Will most of the things in our lives be disposable and whimsical? It makes you want to run to the closet and pull out that photo album, grab a book from the shelf, or open up a CD case and pull out the insert.
9. Privacy. If there ever was a concept that we can look back on nostalgically, it would be privacy. That's gone. It's been gone for a long time anyway. There are cameras on the street, in most of the buildings, and even built into your computer and cell phone. But you can be sure that 24/7, "They" know who you are and where you are, right down to the GPS coordinates, and the Google Street View. If you buy something, your habit is put into a zillion profiles, and your ads will change to reflect those habits. And "They" will try to get you to buy something else. Again and again.
All we will have that can't be changed are Memories.
10. Facts About The Deindustrialization Of America That Will Blow Your Mind
The United States is rapidly becoming the very first "post-industrial" nation on the globe. All great economic empires eventually become fat and lazy and squander the great wealth that their forefathers have left them, but the pace at which America is accomplishing this is absolutely amazing. It was America that was at the forefront of the industrial revolution. It was America that showed the world how to mass produce everything from automobiles to televisions to airplanes. It was the great American manufacturing base that crushed Germany and Japan in World War II.
But now we are witnessing the deindustrialization of America .. Tens of thousands of factories have left the United States in the past decade alone. Millions upon millions of manufacturing jobs have been lost in the same time period. The United States has become a nation that consumes everything in sight and yet produces increasingly little. Do you know what our biggest export is today? Waste paper. Yes, trash is the number one thing that we ship out to the rest of the world as we voraciously blow our money on whatever the rest of the world wants to sell to us. The United States has become bloated and spoiled and our economy is now just a shadow of what it once was. Once upon a time America could literally out produce the rest of the world combined. Today that is no longer true, but Americans sure do consume more than anyone else in the world. If the de-industrialization of America continues at this current pace, what possible kind of a future are we going to be leaving to our children
Any great nation throughout history has been great at making things. So if the United States continues to allow its manufacturing base to erode at a staggering pace how in the world can the U.S. continue to consider itself to be a great nation? We have created the biggest debt bubble in the history of the world in an effort to maintain a very high standard of living, but the current state of affairs is not anywhere close to sustainable. Every single month America goes into more debt and every single month America gets poorer.
So what happens when the debt bubble pops?
The de-industrialization of the United States should be a top concern for every man, woman and child in the country. But sadly, most Americans do not have any idea what is going on around them.
For people like that, take this article and print it out and hand it to them. Perhaps what they will read below will shock them badly enough to awaken them from their slumber.
The following are 19 facts about the de-industrialization of America that will blow your mind....
#1 The United States has lost approximately 42,400 factories since 2001. About 75 percent of those factories employed over 500 people when they were still in operation.
#2 Dell Inc., one of America's largest manufacturers of computers, has announced plans to dramatically expand its operations in China with an investment of over $100 billion over the next decade.
#3 Dell has announced that it will be closing its last large U.S. manufacturing facility in Winston-Salem, North Carolina in November. Approximately 900 jobs will be lost.
#4 In 2008, 1.2 billion cell phones were sold worldwide. So how many of them were manufactured inside the United States? Zero.
#5 According to a new study conducted by the Economic Policy Institute, if the U.S. trade deficit with China continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone.
#6 As of the end of July, the U. S. Trade deficit with China has risen 18 percent compared to the same time period a year ago.
#7 The United States has lost a total of about 5.5 million manufacturing jobs since October 2000.
#8 According to Tax Notes, between 1999 and 2008 employment at the foreign affiliates of U.S. parent companies increased an astounding 30 percent to 10.1 million. During that exact same time period, U.S.employment at American multinational corporations declined 8 percent to 21.1 million.
#9 In 1959, manufacturing represented 28 percent of U.S. economic output. In 2008, it represented 11.5 percent.
#10 Ford Motor Company recently announced the closure of a factory that produces the Ford Ranger in St. Paul, Minnesota. Approximately 750 good paying middle class jobs are going to be lost because making Ford Rangers in Minnesota does not fit in with Ford's new "global" manufacturing strategy.
#11 As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time less than 12 million Americans were employed in manufacturing was in 1941.
#12 In the United States today, consumption accounts for 70 percent of GDP. Of this 70 percent, over half is spent on services.
#13 The United States has lost a whopping 32 percent of its manufacturing jobs since the year 2000.
#14 In 2001, the United States ranked fourth in the world in per capita broadband Internet use. Today it ranks 15th.
#15 Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.
#16 Printed circuit boards are used in tens of thousands of different products. Asia now produces 84 percent of them worldwide.
#17 The United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States .
#18 One prominent economist is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040.
#19 The U.S. Census Bureau says that 43.6 million Americans are now living in poverty and according to them that is the highest number of poor Americans in the 51 years that records have been kept.
#20 Morallity has eroded significantly in the last 60 years.
So how many tens of thousands more factories do we need to lose before we do something about it?
How many millions more Americans are going to become unemployed before we all admit that we have a very, very serious problem on our hands?
How many more trillions of dollars are going to leave the country before we realize that we are losing wealth at a pace that is killing our economy?
How many once great manufacturing cities are going to become rotting war zones, like Detroit, before we understand that we are committing national economic suicide?
The de-industrialization of America is a national crisis. It needs to be treated like one.
If you disagree with this article, I have a direct challenge for you. If anyone can explain how a de-industrialized America has any kind of viable economic future, please do so.
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4) Latest Budget Office Results of the Obama's Stimulus Package.
In a blow to the Obama administration, the Congressional Budget Office (CBO) has concluded that the president’s economic stimulus plan created fewer jobs than expected and “crowds out” private investment.
A new report the CBO released on Tuesday finds that the American Recovery and Reinvestment Act may have boosted the economy in the short run by sustaining some 700,000 jobs at its peak in 2010 but “will reduce output slightly in the long run — by between 0 and 0.2 percent after 2016.”
The report estimates that the total number of jobs the plan produced was far fewer than the 3.5 million the Obama administration predicted during the peak of spending.
The CBO estimates that the stimulus is responsible for sustaining between 600,000 to 1.8 million jobs during this quarter, which lowered the nation’s unemployment rate by as much as 1 percent.
In July, the conservative Weekly Standard estimated that Obama’s stimulus package had cost taxpayers $278,000 for every job it created.
There was no immediate comment from the White House on the CBO report, but officials haveinsisted in the past that the economy would have fallen into a depression without the jobs act..
In September, White House press secretary Jay Carney called it “uncontestable” that the infrastructure projects the act created “were very well managed, came in on budget or under budget and led to the creation of many, many jobs” that would not have been created otherwise.
CBO, a nonpartisan agency, has re-evaluated the stimulus every three months with varying estimates of the total price tag — from $787 billion, up to $862 billion and now $825 billion.
The agency also has changed its model for the spending's impact on the economy, and the new calculations show that the act did less than originally projected.
CBO’s latest report reveals that the top-end decline of two-tenths of a percent is deeper than the agency predicted before the stimulus passed in February 2009, according to a report in The Washington Times.
At the peak of spending from July through September 2010, the American economy sustained between 700,000 and 3.6 million jobs, which lowered the unemployed rate between four-tenths of a percent to 2 percent, The Times reports.
An opinion piece in the Atlanta Journal-Constitution acknowledges that the stimulus failed to keep unemployment below 8 percent, as the Obama administration had projected, but blamed the discrepancy on a greater decline in the gross domestic prodcut than previously estimated.
“In short, in early 2009 we thought the economy had fallen off a ladder,” the article says. “In reality, it had fallen off a six-story building.”
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